Customer Lifecycle Management (CLM): A Comprehensive Guide

When you have access to customer data for every stage in the buyer journey, you can manage your customer lifecycle better. Therefore, you need to understand the key difference between the buyer journey and the customer lifecycle to cater to your customers' pain points and deliver a positive customer experience every single time.

What are the 5 stages of the customer lifecycle?

1. Awareness:

The first step to customer success is making your audience aware of your products/services. Awareness is a customer-driven process where you must identify a customer need and attract your target audience by presenting a solution that fulfills that need. This solution may include a list of services/products or vendors you partner with.

2. Evaluation/consideration:

Once your prospect is aware of your brand, product or service, they evaluate your solution against other solutions they might have encountered. Which of these solutions solves their critical needs? Which channel do they intend to buy through? Is it easy to use, flexible and affordable? It may take follow-up sessions, a few calls, or some notes that highlight customer needs, to help customers lock down their options.

3. Purchase:

The purchase stage of the client lifecycle brings in revenue for your business and puts the customers at ease because once you establish trust with your customers, they are likely to invest in you if you continue to provide solutions for their evolving needs. With businesses reaping the benefits of their investment, it’s advisable to nurture a pool of existing customers who can continue to bring in revenue.

4. Customer retention:

Once a purchase is made, the customer experience that follows plays a critical role in how customers perceive your post-purchase service. You need to be available across communication channels with the right resources to resolve any customer query that may come your way. This helps you ensure that your customers have a positive service experience and choose to stay connected with your brand.

5. Loyalty/advocacy:

Once you successfully retain your customers, you need to turn them into your brand champions. If you cannot nurture a pool of loyal customers, you may want to analyse each stage and identify factors influencing your customers directly. You may even ask your customers how to secure their advocacy. Use customer-facing feedback to engage with your customers and take steps towards improving their overall customer satisfaction.

Every customer progresses through these five stages of the customer lifecycle. You can take control of these stages by using customer lifecycle management to create a loyal customer base and grow your business exponentially.

What is customer lifecycle management (CLM)?

Customer lifecycle management (CLM) refers to monitoring, managing and optimizing every stage of the customer lifecycle to facilitate personalized customer journeys, reduce churn and promote customer loyalty.

Customer lifecycle management is a framework that allows you to dive deeper into your customer data, map out your customer journey, analyse key metrics like customer lifetime value (CLV) to meet customer needs and optimize the performance of your business.

What is customer lifetime value?

CLV refers to the total revenue that a customer brings or is likely to bring to your business across their entire relationship with your business. It measures the total profits that your company makes from a single customer and is calculated as the difference between the total revenue earned and the initial costs invested in acquiring/onboarding a customer.

What are the benefits of customer lifecycle management?

Customer Lifecycle Management (CLM) offers many benefits for businesses across various industries. CLM enhances customer satisfaction by creating personalized experiences. By understanding customer needs, preferences, and behaviors, businesses can create more personalized customer interactions that foster stronger relationships and loyalty to a brand. Personalized approaches mean customers feel more valued and understood, increasing satisfaction and customer retention.

Customers are also more likely to recommend a brand to others with increased levels of satisfaction. If customers are more satisfied with your brand, they will likely promote it for free to their friends, family, and others. Word-of-mouth is an effective way to increase your customer base and boost sales. 

Acquiring new customers can be costly. This means retaining existing customers and fostering brand loyalty is important. CLM is one of the best ways to enhance existing customer relationships. These strengthened customer experiences can drive sales and increase profits by allowing businesses to upsell and cross-sell while being informed about customers' needs and preferences. Sales and marketing teams will be able to cater to customers' needs and resolve any issues in a more timely manner as well. 

CLM can also create a more competitive advantage. CLM helps businesses identify room for improvement in how they communicate with customers and identify any problems hindering growth. If teams can pay better attention to the customer journey and fix issues before they become a problem, a business develops a better competitive advantage. As CLM helps businesses make data-driven decisions and adapt to market trends and customer preferences, businesses stay ahead of the competition.

Why is customer lifecycle management important?

To stay competitive, it’s important to understand how you’re delivering customer experience as compared to your competition. Small and medium businesses may test out different strategies and pick and choose which areas of the customer experience to focus on. Still, organizations in mature markets generally adhere to a certain standard.

Mature marketplaces refer to a wider variety of consumers. This means that if you lose a customer on account of poor experience or low customer satisfaction, they can easily switch to other options. This is why customer lifecycle management ensures a high customer lifetime value. All you need to do is determine the health of customer accounts, check the status of your relationship and track customer lifecycle metrics across touchpoints, to detect early signs of churn.

CRM vs CLM

A CRM and a CLM complement each other to drive business results by personalizing customer journeys. Customer Relationship Management software captures customer data and enables you to build a relationship with your customer by delivering seamless customer experiences.

The Customer Lifecycle Management (CLM) software tracks a customer from their first interaction with your business and continues to do so till they stay with your brand. The Customer Lifecycle Management software captures data around the stages of the customer lifecycle and customer needs, so you can meet customer expectations at every stage.

While a CRM helps you build and nurture customer relationships, a CLM helps you leverage that relationship to get more business, referrals, and brand advocates.

How can a customer lifecycle management strategy be created?

Identify your target audience

Before your customers discover your brand, products or services, determine who you’re trying to reach. Identify a target audience and identify the customer needs that you can fulfil. This approach will enable you to create relevant resources that meet customer expectations at every touchpoint.

The best way to define your target audience is to create a buyer persona. Buyer personas represent the demographic and behavioural characteristics of your customer base. You may assign names, stories, and even hobbies to your persona. Remember, these personas may be subject to change as your customer needs evolve.

Create and share the right resources

Once you create your buyer persona and identify your customer segments, you can now understand your needs and desires. This leads you to the next step of your customer lifecycle strategy.

Create relevant content around your products and services for customers who might be interacting with your brand for the first time. You may further link these pages to suitable support articles that assist customers on how to make the most of the featured capabilities to solve their issues. 

You can even create and share content in different formats like case studies, webinars and testimonials so your customers can invest their trust in your business. Once you get a customer on board, analyse their behaviour and share resources that may help you upsell/cross-sell your products to these customers, to generate more revenue.

Initiate self-service

Self-service makes it easier for potential customers to learn and interact with your brand without the need to engage with a customer support agent.

Make sure you create a knowledge base, host an FAQ page, and enable chatbots and community forums that offer as much information as possible to your customers. It has been established that customers like to be in complete control of their journey, so ensuring that they have access to the right resources to educate themselves will further increase the possibility of doing business with you.

Offer proactive customer service

You have identified your customer pool, created the right resources and enabled self-service at this point. However, some of your customers still have questions about your product or your company. If you’re unable to bridge the gap and resolve their queries, it can lead to churn or even the possibility of potential customers walking away from a purchase.

You need to train your customer service team to proactively engage with your customers to resolve any queries, assist them through their purchase decisions, and even offer them trials or demos to familiarize them with your products. Proactive customer service not only boosts your brand reputation but improves customer retention.

Simplify customer support through app integrations

App integrations enable your customer support team to work with multiple data sets and get a complete view of customer context from a single dashboard. By merging and optimizing customer data and workflows, customer support teams can work seamlessly with other teams to respond to customer queries proactively, without the need to toggle between multiple apps.

For example, you can integrate your Shopify store with your help desk software. This allows your customer support agents to engage with your customers effortlessly, no matter which channels they choose to communicate. Instead of moving from one app to the other, agents can access customer data within the help desk and ensure a seamless shopping experience, encouraging customers to confirm their purchases and check out safely. Once they have a positive experience with your brand, they are more likely to become your repeat customers.

Personalize the post-purchase experience

You need to personalize customer experience across every stage of the customer lifecycle. Remember to guide and be available for your customers after they purchase. This is an important step to improve customer relationships and turn existing customers into repeat customers.

You must ensure that your customers feel as heard and valued post-purchase as they felt pre-purchase. Follow up with your customers to let them know you are around if they need help. From setting up an automated email system to thanking customers for their orders, small gestures like these can nurture a pool of loyal customers. You can even reach out to your customers to confirm if they are happy with their purchase experience and the quality of the product/service.

Deploy automation

As your customer base grows, you must scale your efforts to keep up with customer demand. This is where automation comes into play. When you automate complex workflows and let AI do the heavy lifting, you can monitor every customer interaction closely to stay updated about any changes in customer behaviour, prioritize customer requests based on urgency and redirect customers to the right resources to continue their journey.

For example, you can set up a workflow that automatically triggers an email to your customer if they abandon an item in their cart if the item on their wish list is now available at a discounted price or if they have just completed their first purchase with you. A steady line of communication with your customers helps you maintain an active relationship with them and makes them feel valued at every step.

Encourage customer feedback at every stage

When you go above and beyond for your customers to make their experience worth their time and effort, all they need is some encouragement to share the good word about your brand. Happy customers are willing to share their experience if you make it simple for them to do the same.

You can email them a short survey once they complete a purchase, or share a link with them that redirects them to your Google reviews site. You can even offer them a discount coupon for rating their experiences or sharing a referral to try your brand. By collecting customer feedback from time to time, you will be able to understand their latent needs, and the gaps in your services and leverage these data points to redesign your customer lifecycle.

You can follow the steps mentioned above to ensure you create a holistic client lifecycle management strategy. We have also compiled a few best practices in customer lifecycle management to help you deliver the best customer experience possible.

Examples of customer lifecycle management

One example of customer lifecycle management can be found by analyzing streaming services. Subscription-based streaming services have data-driven algorithms that personalize user experiences and analyze browsing history, viewing preferences, and more. With this data, these streaming services are able to recommend personalized content for users, which entices users to continue subscriptions, sign up for subscriptions, or share a streaming platform with others. 

Once a customer is a subscriber, the streaming service focuses on keeping their loyalty. With features like personalized recommendations, content categories, and user-friendly interfaces, streaming services can keep users engaged and satisfied with the service. As customers continue to use the service, the data analytics become more robust, and the company can evaluate data more in-depth. Viewing habits, engagement metrics, and more can help services sell more premium subscriptions or cross-sell additional services. Using targeted communication channels like email or notifications can also help to communicate personalized recommendations with subscribers. 

Another example of CLM is by analyzing airline companies. Some airline companies focus on attracting customers through targeted marketing efforts and personalized promotions. These companies use data analytics to identify potential customers based on factors like travel preferences, geographic location, and past bookings. This data helps inform airlines on how to tailor advertising and special offers to specific customers and capture customer interest to book flights with the airline. 

Once these travellers become specific airline customers, the company will likely prioritize enhancing travel experiences and building customer loyalty. Many companies will invest in service training, social media engagement, flight notifications, and more to do this. The company will then use data-driven insights to create loyalty programs and initiatives. Creating reward systems and incentives, as well as creating targeted promotions for travel, is beneficial to increasing loyalty. These airlines will also advocate for customers to share their positive experiences through customer testimonials, social media campaigns, and more.

What are the best practices in customer lifecycle management?

Customers like knowing that you’re committed to them. Customer lifecycle management assures your customers that you intend to be by their side through every stage of the client lifecycle.

1. Walk through every stage of the customer lifecycle, from the customer’s point of view.

2. Monitor and keep tabs on how customers engage with you across multiple touchpoints.

3. Interact and unearth customer needs and latent desires during the customer journey.

4. Interpret your customer behaviour and get an understanding of what works and what doesn’t.

5. Prioritize to bridge the gaps and redesign your customer journey to improve customer engagement.

By harnessing customer data and making it accessible to everyone who needs it, you can build a seamless customer lifecycle management process that will boost customer retention and drive long-term revenue.

Grow your business with CLM

Every organization approaches customer lifecycle management differently. For example, a prospective customer should not receive the same communication resources as a long-term, valued customer. You can craft a lead nurture campaign using personalized messaging for former customers or you might cold call potential customers and target them with resources like an e-book. Just remember that your customer lifecycle management strategy will differ based on the type of your industry.

Elevate your Customer Lifecycle Management with Freshworks' Customer Service Suite, designed for businesses seeking to differentiate their customer engagement strategies. Whether it’s personalizing communication for long-term clients or efficiently targeting prospective customers, Freshworks provides tailored solutions for every stage of the customer journey, adaptable across various industries.

Sign up for a free trial or request a demo today at Freshworks Customer Service Suite and start redefining your customer interactions for the better.